NEW YORK - AOL Time Warner Inc. said yesterday that it has agreed to buy IPC Group Ltd., the No. 1 magazine publisher in the United Kingdom with about 100 titles, for $1.64 billion.
IPC, a unit of Cinven Ltd., sells about 350 million magazines a year, including Horse and Hound, New Musical Express and Marie Claire.
AOL Time Warner wants to increase subscriptions to magazines such as Time and In Style, and to services such as America Online, as advertising growth declines at its media holdings. The purchase may help AOL Time Warner, the world's largest Internet and media company, achieve its goal of getting half its revenue from outside the United States in 10 years, up from 17 percent now.
"AOL Time Warner is counting on subscription-based services to drive them forward," said William Blair analyst Abhishek Gami. The company is "buying assets that are weakly priced, given the current environment," with the intent of boosting them "with cross-marketing deals," he said.
The Time Inc. unit of AOL Time Warner is selling about 100,000 magazine subscriptions a month through America Online, the company said last week. America Online has about 30 million subscribers.
AOL Time Warner's publishing businesses contributed $1.2 billion, or 13 percent, of the company's $9.2 billion in second-quarter sales. The publishing unit's second-quarter sales fell 1 percent because of the decline in advertising, AOL Time Warner said last week.
Cinven, an investment company, led a management buyout of IPC from Reed Elsevier PLC, the world's largest publisher of scientific journals, in January 1998.
